"Gigs" are becoming lifelines for seniors
Marilyn Kolleth, 74, was happily retired for six years when her condominium’s homeowner’s association imposed a 60 percent boost in monthly fees. While able to afford that hike, the former medical technician began to worry about whether her modest retirement savings would hold up to future cost-of-living increases.
Responding to her concerns, Kolleth’s daughter introduced her to the so-called “gig” economy. Now Kolleth supplements her retirement income with $600 in monthly payments from renting out a spare bedroom through a service called SilverNest.
She’s among a small, but rapidly growing, segment of retirees who have embraced web-based platforms, from AirBnb to Lyft, to secure extra income in retirement.
“This online marketplace is offering a wide variety of opportunities, whether it’s driving a vehicle, doing desk work, filling out surveys or renting out an asset,” said Fiona Greig, director of consumer research for JPMorgan Chase Institute. “As a supplemental source of income, these are material dollars -- especially when the alternative is to spend down your savings.”
Indeed, an AARP analysis of Census Data found that the average retiree takes home less than $3,000 per month, so being able to earn a few hundred -- or even a few thousand -- extra dollars each month can be life-altering.
A study conducted by the JPMorgan Chase Institute found that roughly 4.2 percent of retirees have used the gig economy to earn money over the past three years, up 47-fold over the period. Moreover, the study, which used anonymous data from JP Morgan Chase customers to draw a wide sampling, found that seniors generated a larger segment of their income from the gig economy than any other group.
Separating labor platforms, such as Uber and Fiverr, which require the senior to provide work, from asset-based platforms, such as Kangaroom and eBay, the Chase research found that individuals 65 and over generated 28 percent of their income from labor-based gigs and 11.5 percent from asset-based gigs. Among all age groups, just 26 percent of income came from labor-based gigs and 10.7 percent from asset-based income from online platforms.
Think you’d like to supplement your income through “gigs?” Experts suggest that you start by deciding whether you want to provide labor or earn money by selling or renting an asset. Then research the different platforms to compare the benefits and costs.
Multiple platforms provide the same services. And although you can use more than one platform, it might be smarter to focus on one that provides the best return on your time. An analysis by Nerdwallet, for instance, found that Uber drivers generally earned more than those driving for Lyft or Sidecar. However, the result varied by geographic region.
Kolleth chose an asset-based platform, SilverNest, because it provided background screening for long-term rentals. She was able to find a tenant, who she personally likes and who likes Kolleth’s dog and is willing to watch the animal when Kolleth travels.
Kolleth also appreciates knowing someone else is around regularly. Others, however, might not want a full-time tenant, preferring the shorter-term nature of a vacation rental through a site such as AirBnb or HomeAway.
If you’d rather earn income through work, realize that activity-based gigs are ubiquitous. Services such as TaskRabbit and Fiverr allow you to earn income from doing everything from picking up a client’s dry cleaning to providing web-based testimonials.
Want to earn income driving, but not late at night? Consider HopSkipDrive, which is designed to ferry minors from school to baseball practice and other activities in the middle of the day. Cathy Vaccher, an elementary school teacher, said she earns about $150 a week driving for HopSkipDrive after school. She likes it better than Uber because she’s a diminutive 4-foot-11 and not comfortable picking up adults.
Or take Sandra Tjader, who has turned caring for dogs through DogVacay into a full-time profession. The former office manager lives on a 25-acre parcel in the Santa Cruz, California, mountains and said she used to board dogs part-time on her own. However, marketing her service and collecting payment was a chore.
So she signed up for DogVacay. Now 20 percent of Tjader’s dog-boarding fees go the online service, but collecting payment is no longer a nightmare, and the business has gone gangbusters. Tjader estimates that she now earns $60,000 annually and is turning away clients because her facility is usually full.